The penny drops on commercial real estate
Posted: Jul 09, 2024
- U.S. prosecutors targeting commercial mortgage fraud in $4.7 trillion industry - Rise in property loans based on doctored financials and valuations - Fraud became more common during surge in commercial property prices - Drop in property values exposing more schemes due to rise in defaults - Fraud occurring during boom times now revealed during bust times - Lenders often trust building values without proper auditing - Examples of landlords pleading guilty to fraud charges after falsifying data in cities like Cincinnati, Hartford, and Little Rock
🚨 Reddit sentiment: negative - Most comments express concerns about fraud, economic downturns, and the questionable practices in commercial real estate. Summarized comments: - Concerns about fraud at major commercial appraisal firms - Appraisers are pressured to go along with fraud - Lenders haven't admitted losses, so it's not a problem yet - Some believe fraud is already factored into market prices - Interest in finding cheap commercial real estate deals - Discussions on AI tools for real estate and fraud detection - Comparison to previous economic downturns and notable figures
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